• South Korea's People Power Party urged review of the 22% digital asset tax before its January 2027 start.

• The draft applies 20% tax on income above a 2.5 million won annual deduction, 22% including local tax.

• First filings for 2027 digital asset gains fall in May 2028 during comprehensive income tax reporting.

People Power Party Urges Tax Recheck

South Korea's main opposition People Power Party called on Monday for a full rethink of the digital asset tax scheduled to take effect on January 1, 2027, saying the country's tax infrastructure cannot yet apply the levy fairly or accurately. At a policy roundtable on digital asset taxation held at the National Assembly main building in Yeouido, floor leader Jung Jeong-sik said the principle of taxing income where it arises remains sound, but with only months left before implementation, whether the systems exist to tax digital assets correctly deserves a second, careful look. Jung identified verification of acquisition costs and transaction histories for funds moved through overseas exchanges and personal wallets as the central unresolved problem. Standards are also missing, he said, for how income and losses from newer transaction types — staking through services such as Ether.fi (ETHFI), Bitcoin DeFi activity and airdrop distributions — should feed into taxable income. He further questioned whether the current framework still fits after South Korea scrapped its financial investment income tax: taxing digital asset gains at a combined 22% while small investors in domestic listed shares pay nothing on exchange-traded gains raises an asset-class fairness problem, in his view. The burden question, he argued, is generational as well — with inflation, a tight job market and housing costs making it hard to build assets from wages alone, more young Koreans have entered digital asset markets, and a rushed tax would send most of the resulting confusion and cost back to them. Party policy committee chairwoman Lim I-ja echoed the concerns, stressing that taxpayers must be able to predict what is taxed and how much is owed, and that assets arriving from overseas venues or privacy wallets — including assets like Monero (XMR) where transaction details are concealed by design — often cannot be traced to an acquisition date or price, which caps accurate income calculation. The party said it will review both the implementation timeline and the gaps in the current design based on the feedback gathered.

DAXA Presses Careful Design

Industry representatives at the same session pressed for deliberation over speed. Oh Se-jin, chairman of the Digital Asset Exchange Joint Consultative Body (DAXA), noted that digital asset income taxation has been under discussion since 2020 and has passed through multiple reviews and postponements to reach next year's start — yet disputes over income classification, tax infrastructure and timing continue into the final stretch. A levy debated this long, he argued, must be handled deliberately, because regulatory uncertainty is a risk for operators and investors alike. Oh also tied taxation to the broader legislative agenda: South Korea's user-protection law for virtual assets is in force, but he described the follow-up Digital Asset Basic Act — the sector's “second-stage” legislation — as a long-awaited industry priority, and said legal definitions and the market's institutional framework must advance in step with tax design. DAXA committed to acting as a bridge between government and the private sector toward a trusted ecosystem. Lawmakers laid out the mechanics at issue in concrete terms: under the current draft, income from digital asset transfers and lending is classified as other income, with a 2.5 million won annual deduction and a 20% rate on the excess — 22% once local income tax is included. Lim flagged non-resident taxation as needing clearer rules alongside staking and DeFi income, and said the legal character of digital assets and the Basic Act's institutional framework must interlock with tax legislation rather than run on separate tracks. A bill demanding changes to the timing and method of the levy is already under review at the National Assembly, and a national petition seeking a postponement has cleared 50,000 signatures — the threshold that requires review by the relevant standing committee.

May 2028 Filing Window in Focus

COINOTAG's read: the roundtable signals real delay risk for a levy that is statutorily close to launch. The draft legislative text we are looking at states that transfer and lending income from digital assets counts as other income, taxed at 20% after a 2.5 million won deduction — 22% including local income tax — applying only to gains arising from January 1, 2027, with the first reporting window in May 2028. Any binding change requires passage of the pending amendments; until then this remains a proposal, not a final rule, and the timing itself is on the table.